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February 13, 2013

In State of the Union, Obama Calls for ‘Smarter’ Government

President says nation is ‘more than halfway’ to goal of $4 trillion in deficit reduction

President Barack Obama gave the State of the Union address flanked by Vice President Joe Biden, left, and House Speaker John Boehner. (Photo: AP)

While President Barack Obama’s State of the Union address Tuesday evening centered on building a strong middle class—including raising the minimum wage—he addressed a range of issues including gun control, immigration, the economy, comprehensive tax reform and the looming sequestration cuts.

Obama told members of Congress that the nation expects lawmakers “to put the nation’s interests before party. They do expect us to forge reasonable compromise where we can.”

To that end, Obama continued, “Our work must begin by making some basic decisions about our budget—decisions that will have a huge impact on the strength of our recovery.”

Over the last few years, he said, “both parties have worked together to reduce the deficit by more than $2.5 trillion—mostly through spending cuts, but also by raising tax rates on the wealthiest 1% of Americans. As a result, we are more than halfway toward the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.”

Obama went on to lay out his plan for further reducing the deficit, stating that his “additional proposals … are fully paid for and fully consistent with the budget framework both parties agreed to just 18 months ago. Let me repeat—nothing I’m proposing tonight should increase our deficit by a single dime. It’s not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth.”

Broad-based economic growth “requires a balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share. And that’s the approach I offer tonight,” Obama said.

Obama said his deficit reduction plan was two-pronged: enact reforms to Medicare that will achieve the same amount of health care savings as reforms proposed by the Simpson-Bowles Commission, and “getting rid of loopholes and deductions for the well-off and the well-connected.”

After all, Obama said, “why would we choose to make deeper cuts to education and Medicare just to protect special-interest tax breaks? How is that fair? Why is it that deficit reduction is a big emergency justifying making cuts in Social Security benefits but not closing some loopholes? How does that promote growth?”

To that end, Senate Majority Leader Harry Reid, D-Nev., said in a statement after Obama’s speech that “Later this week, Democrats will introduce a plan to temporarily replace the sequester with the balanced approach the American people want.” So far, he said, “Republicans have shown that they would rather cut Medicare, education and cancer research than close a single tax loophole, or ask millionaires to contribute.”

But Sen. Orrin Hatch, R-Utah, Ranking Member of the Senate Finance Committee, said Obama’s speech was a “missed opportunity…to bring both parties together to outline a reasonable path forward to create jobs and grow our economy, reform government and cut our nearly $16.5 trillion debt.”

Instead, Hatch said, “what we heard was rhetoric that seemed more about appeasing the president’s liberal allies and less about actually solving the pressing issues facing our country. With unemployment hovering around 8% for the longest time in recent memory, it’s time we come together on policies that will create jobs and expand our economy.”

More calls for tax hikes, Hatch continued, and for “increased government spending, and more campaign rhetoric are not solutions to move our country forward. The sooner the president realizes this, the sooner our country can once again become the country we know it can be.”